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Dutch AI Startup Wants to Reveal the Real Value of Your Property

(Bloomberg) -- When Teun van den Dries first bought a house eight years ago, the appraiser determining the market value of the home simply asked him how much he thought it should cost.

That experience partly led the Dutch entrepreneur and co-founder Sander Mulders to launch GeoPhy, a platform that offers artificial intelligence-powered real estate valuations and seeks to bring more transparency to the market.

The company, which started in 2014, announced Thursday that it raised $33 million in a Series B funding round led by Index Ventures, the London and San Francisco-based venture capital firm that has backed companies like Adyen, Deliveroo and Slack. Existing investors Hearst Ventures and Inkef Capital also joined the round.

“Essentially in all other industries, there is no real equivalent, where this much money trades hands with this little information,” van den Dries said in an interview.

GeoPhy amalgamates and analyzes thousands of data points – from satellite images, sales data and property records to crime rates, green spaces and the density of nearby independent coffee shops -- to determine property valuations. The company currently focuses on commercial real-estate, but plans to expand to the residential market.

The service helps clients, such as rating services, banks and mortgage providers like Fannie Mae, to better understand the value of commercial properties and build more accurate lending models.

“What we have now is a very subjective way to value and analyze property performance -- you might catch an appraiser or head of acquisitions on a bad day” for instance, said Aaron Perlis, chief technology officer at commercial real-estate finance company Walker & Dunlop, which also is a GeoPhy client. “When you’re a lender, like we are, we want to try to understand the real value of a property, what’s the objective value that I can back up statistically.”

GeoPhy executives say the company offers less-expensive and faster valuations than standard appraisals, which can take about a month and cost as much as $6,000. Based in Delft, the Netherlands, the company employs about 100 people and has offices in New York, London and Lithuania.

The new funding will help expand the startup’s presence in the U.S. and Europe, with plans to move into the Asia-Pacific region in 2020. Those expansion plans also pose challenges for the company. Adoption will likely vary from country to country depending on access to data.

GeoPhy’s ultimate goal is to eventually understand the value of every building in the world.

“That’s the aim and the aim is high,” said Jan Hammer, a London-based partner at Index, who will also join GeoPhy’s board.